For sports fans, the football World Cup means serious skills on display, mind-blowing action, and an infectious atmosphere charged with emotion. For business and industry, not so much.
The truth is that the world’s biggest sporting event, held this year in Russia, has far-reaching effects on the bottom line in the books of businesses around the globe. We can expect sports goods stores to have a run on team shirts and other paraphernalia.
However, other retailers, or even brewers, the betting, hospitality and travel industries, municipal entities and service providers, and other sectors also feel the effects of the world turning its collective gaze on the World Cup. This is what happens.
Sports Betting and Casinos
The industry that arguably sees one of the biggest boosts during the World Cup is that of sports betting, which is another no-brainer. This year’s tournament may be different for many a casino online too, as several popular gaming sites now also offer sports betting. With the most prestigious of all trophies at stake, the action in the stadiums is already intense. Few punters can resist intensifying it even further by putting money on games, and few fans can hold back when it comes to placing a bet as a show of support.
Bookmakers sprang into action long before the first chords of the opening ceremony sounded. It’s a dicey game, though, because a favourite such as Brazil snatching the cup could see those same companies nursing a few financial dents. A UK bookmaker predicted it would receive approximately CA$4.3 billion in bets, while in Australia, a local bookie said it expected to see CA$12.3 million pouring in.
However, according to reports, the casino industry usually takes a bit of a knock during the tournament. A glaring example of this was the Asian gambling capital of Macau. Famous for offering table games such as the well-supported Baccarat, the entire region saw a decline in gross revenue for the duration of the 2014 competition.
Sporting Gear and Goods
Concrete facts and figures spell out clearly just how much of an effect the most famous of all soccer tournaments has on the sporting apparel and goods sector. Apart from a surge in team-related items, retailers also see balls and gear fly off the shelves as sporting fever takes hold of fans.
In 2014, Adidas reported jersey sales in excess of 8 million, with 2 million of those being in the colours of that year’s winner, Germany. Those figures are likely to increase this year, as the leading manufacturer is an official sponsor of 12 of the 32 teams who started out in the tournament. The remaining 10 teams are being sponsored by rival manufacturer, Nike.
Benefit vs. Cost
The successes of such industries and businesses during the tournament are usually used as a motivation for nations to play host. Considering 2002’s was expected to impact Japan and South Korea’s economies positively by US$9 billion, 2006’s was expected to generate a US$12 billion positive impact for Germany, and 2010’s to generate US$5 billion for South Africa, it looks like there could be something to it.
The truth, however, it not so clear-cut. There is no doubt that many sectors do benefit immensely, but, on the whole, the host nation may actually be doing itself a disservice. Take South Africa, for example. The 309 000 visitors who passed through its borders for 2010’s World Cup sounds impressive – until it is pointed out that an average of 620 000 visitors entered the country every month during the rest of the year.
Love it or hate it, the World Cup means serious business. A match day could be the difference between making that monthly profit or not, no matter how far a business is from where the action is really happening.